The TIE
December 14, 2020

The TIE Weekly Insights (Dec 14)

Highlights from last week:

Market Overview

Grayscale Investments caught the media’s attention this week, as they have broken above $10B in digital assets under management. With the hype surrounding XRP, it was only natural that the highly anticipated Spark airdrop would make the headlines.

Trending Topics

The total cryptocurrency market cap decreased by -2.1%, from $573B to $561B. We saw a lot of red this past week as weekly returns were down across the board. After weeks of euphoria, the market has cooled off with Bitcoin near all time highs. The major assets were overextended with most of them being double digit percentages away from their 50 day moving average. The table below shows that these assets have reverted back closer to their means (except XRP). Trading volume and Tweet volume were decreased by double digits on average. Despite all of this, long term investor sentiment continues to be positive for the major cryptocurrencies, with the median sentiment score being 68.2 (high).

Market Overview

Institutional Adoption

The influx of banks and institutional investors supporting digital assets has continued this week. JPMorgan announced on Thursday that it had executed a blockchain based repurchase agreement transaction using its eponymous JPMCoin. This is just two months after they unveiled a rebrand of its blockchain unit and mentioned its stablecoin-like product going into production.

Massachusetts Mutual Life Insurance Co. revealed their $100M investment in Bitcoin and a $5M equity stake in NYDIG, a fast growing institutional crypto shop with $2.3B under management.

Southeast Asia’s largest bank, DBS, officially announced on Thursday that it is launching a full-service digital exchange to provide tokenization, trading, and custody for digital assets. They will support four fiat currencies, including the Singapore dollar, U.S. dollar, Hong Kong dollar, and Japanese yen.

Switzerland’s biggest stock exchange, SIX, has acquired a crypto service provider aimed at institutional investors and banks. Their hopes are to provide a trusted, safe, secure, and compliant yet seamless access to cryptocurrencies and digital assets.

Weekly Performance of Major Cryptocurrencies

After seeing high volatility and handsome gains over the last few weeks, the majors have slowed down to consolidate. All of the majors performed negatively this past week with a median 7 day return of -2.9%. XRP was the clear outlier here as it decoupled from the rest of the majors on Friday.

Weekly Performance of Major Cryptocurrencies

Bitcoin Struggles Despite More Institutional News

Bitcoin traded within a 10.54% range this past week, from the low of $17,580 to the high of $19,375. Investor sentiment was neutral, with a slight negative skew as indicated by The TIE’s hourly sentiment score. Despite multiple large institutions announcing their support of digital assets, BTC struggled to push any higher. We saw the price of BTC trend down early in the week while trading below the volume weighted average price (VWAP). After nearly a -10% sell off and multiple institutional news releases, the market finally picked up late Thursday night. This was shortly after MicroStrategy’s latest announcement stating that they have completed their $650M debt offering to fund Bitcoin buys. Over the weekend, BTC continued to rebound as it pushed higher and tested the weekly open.

Bitcoin Price vs Sentiment Score

MicroStrategy Raises $650M for Bitcoin Buys

Stellar Volumes Surge

On November 27th the Settle Network launched two new stablecoins in Argentina (ARST) and Brazil (BRLT), both were built on the Stellar blockchain. Now on December 9th, Germany’s Bankhaus von der Heydt (BVDH), established in 1754, is working with Bitbond for the first direct issuance of a stablecoin by a banking institution on Stellar. The EURB stablecoin is fully regulated and backed 100% by Euros, allowing banks and institutional investors to use the cryptocurrency without exposure to counterparty risk. This has created excitement within the XLM community and sparked Twitter conversations. XLM 30 day average reported trading volume has surged by +470% in the past 30 days, climbing from $158.2M to $900.5M. Within the same time period, Stellar has gone from averaging 101.3 tweets about the asset per day to now averaging over 256. The conversations have become increasingly more positive, as XLM’s long term sentiment score has increased from 64 to 72 in the past month.

Stellar Trading Volume vs Tweet Volume

One of the World's Oldest Banks is Issuing Euro Stablecoin on Stellar

XRP Reacts to Spark Airdrop

On Friday December 11th, Flare Network recorded its official “snapshot” of the XRP Ledger to determine how to credit XRP users with free Spark tokens that will be released over the next few months. Leading up to this event, the number of XRP wallets that hold more than 10M tokens had spiked to an all time high of 339. Many exchanges disabled XRP withdrawals and deposits for approximately one hour to take an accurate snapshot of balances. Using BitStamp as an example, they closed for 56 minutes. During this hour, the price of XRP dropped from $0.57 to $0.51 (-10.53%) by the time deposits and withdrawals had resumed. Price continued to trend downwards after the Airdrop snapshot. XRP Tweet volume had started to rise shortly before the snapshot, increasing by +36% at its peak.

XRP Spark Airdrop

Airdrop Snapshot Ushers in Ripple's DeFi Era

XRP Addresses Hit New Peak Before Spark Airdrop

Litecoin Sentiment Shifts

We have seen a shift in investor sentiment on Litecoin since PayPal announced that they now allow US-based users to buy, sell, and hold a handful of different cryptocurrencies, including LTC. LTC’s long-term sentiment score has increased from 42.1 (low sentiment) to 67.1 (high sentiment).

Long term sentiment score: A measure of how positive or negative conversations on Twitter have been about a particular coin over the last 50 days vs. the previous 200 days. A score above 50 implies that conversations have been more positive during the past 50 days vs. the previous 200. A score below 50 implies that conversations are becoming more negative.

Litecoin Long term sentiment score

Filecoin Spikes After Coinbase Announcements

Earlier this week, Coinbase announced that they will be listing Filecoin on the exchange. This sparked Twitter conversations, as Filecoin’s Tweet volume had increased by 947% from the time of the announcement up until a few hours after the asset was actually listed and available to trade. Additionally, the price of FIL had spiked upwards of +8.1% after the initial announcement and spiked another +4.2% after getting listed.

Filecoin

Weekly Performance of DeFi Tokens

DeFi took a big hit this week, as the median token return was -5.7%. The only 3 tokens to perform positively were SushiSwap, Compound, and Bancor.

Weekly Performance of Top 20 DeFi Tokens

Huobi Launches AAVE Staking

PowerPool x Sushi Ecosystem Partnership

Cardano Has Officially Entered the DeFi Space

Binance and Pantera Capital Backed Injective Protocol

Multicoin Capital Leads $1.15M Seed Round for DeFi Protocol Swivel Finance

SUSHI Continues to Rise

Since the recent merge between SushiSwap and Yearn Finance on November 30th, the price of SUSHI has continued to rise. It has climbed from $1.55 to $2.39, increasing by +54% in two weeks. Additionally, SUSHI’s 30 day average Daily Sentiment Score has reached a new high of 60.3 (high sentiment) indicating that conversations on Twitter regarding the asset have been positive as of late.

Sushiswap Price

Just Another Milestone for Total Value Locked in DeFi

Total value locked (TVL) in DeFi has increased at an astonishing rate so far this year. TVL started January at $691M and has just surpassed $15B on Monday, making its year-to-date growth over 2070%.

Total Value Locked in DeFi

The top 6 DeFi projects currently all have over $1B locked, with Maker ($2.64B) and WBTC ($2.20B) leading the way.

Decentralized Exchanges

Uniswap trading volume was up by 5% this week ($2.4B), making up over 60% of all DEX volume. 0x, Sushiswap, and Curve all did over $400M.

DEX Volumes

Rankings

Tweet Dominance

The percentage of overall cryptocurrency tweets that an individual cryptocurrency accounts for on a given day.

Bitcoin currently accounts for over 45.8% of all cryptocurrency related tweets. The chart below shows the next 10 highest cryptocurrencies in terms of tweet dominance. We have seen AAVE and UNI continue to climb higher in the rankings. AAVE nearly makes up 2% of cryptocurrency tweets.

Tweet Dominance

Trading Dominance

The percentage of overall Reported Trading Volume for every cryptocurrency that an individual cryptocurrency accounts for on a given day.

By no surprise, USDT accounts for the most trading volume followed by BTC and ETH. Despite being in the top 10 in terms of trading dominance, ADA accounts for less than 1%.

Trading Volume Dominance

Long Term Sentiment

XRP currently has the highest long term sentiment score at 82 (high sentiment). There is a 8 point gap between XRP and the second highest asset IOTA. The remaining assets have relatively close scores ranging between 73.5 - 69.8.

Long term sentiment

Notable News

German Bank to Launch Bitcoin Investment Fund in January

Spain's Second Largest Bank Launches Bitcoin Trading and Custody in Switzerland

MassMutual Buys $100M in Bitcoin

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This Week's Podcast Episodes

Ep. 32 - Betting $100M+ on North American Crypto Mining with Mike Colyer (DCG Foundry)
In our thirty-second episode Mike Colyer (CEO of DCG Foundry) discusses Digital Currency Group's $100M+ investment in North American cryptocurrency mining, providing financing to miners, miners (shrinking) influence over price, why producing new equipment is so difficult, and more. Listen here

Ep. 33 - Market Making for Digital Assets with Anton Golub (flovtec)
Anton Golub (CEO of flovtec) joins The TIE's podcast to chat STOs, colored coins, liquidity, making markets, and why the lightning network will never work. Anton is a crypto OG, and this episode is a can't miss. Listen here